In the Second Episode of my blog series on insurable interests, we travel to Pennsylvania—my home away from home—to determine how the Keystone State defines insurable interest.
In Pennsylvania, “[t]he general rule is that anyone has an insurable interest who derives pecuniary benefit or advantage from the preservation or continued existence of the property or who will suffer pecuniary loss from its destruction.”1 Further, the courts have stated that “[i]t is not necessary to constitute an insurable interest that the interest be such that the event insured against would necessarily subject the insured to loss; it is sufficient that it might do so, and that pecuniary injury would be the natural consequence.”2
Similar to the law in New Jersey, property ownership is not a requirement in order to hold an insurable interest:
A reasonable expectation of benefit from the property’s preservation is sufficient.  An equitable title or interest or other qualified right will suffice because the test is exposure to financial loss, not fee title. And a person who has made himself responsible for property may insure it against loss.3
Pennsylvania case law relies heavily upon Appleman on Insurance,4 and provides an historical basis concerning the need for an insurable interest beyond ownership:
[S]ince the requirement of an insurable interest arose merely to prevent the use of insurance for illegitimate (gambling) purposes, it should not be extended beyond the reasons for it by an excessively technical construction. And a right of property is not an essential ingredient of insurable interest; any limited or qualified interest, whether legal or equitable, or any expectancy of advantage, is sufficient. It does not matter in what way such benefit arises or the reason loss would occur thereby, limited presumably by dictates of public policy-if such benefit would be lost by destruction of the subject matter, that interest is insurable.
Thus, it may safely be said that a fee title is clearly not required of the insured, nor even a direct property interest, the test of exposure to financial loss being all important. An equitable title or interest or other qualified property right would clearly be sufficient…. And a person who has made himself responsible for property may insure it against loss.5
As stated in my prior post on New Jersey, determining ownership and insurance interests at the outset of a public adjuster’s evaluation of a new claim is extremely important and should not be overlooked. Take the time to review the policy, and if need be, pull the deed or tax assessor information to verify ownership.
Tune in next time to see what state we travel to as we continue this series. As always I’ll leave you with a (mildly) related tune. Here’s a great song from my adolescence, A New Found Glory with You’ve Got a Friend in Pennsylvania:
1 Luchansky v. Farmers Fire Ins. Co., 357 Pa.Super. 136, 138 (1986).
3 Fugah v. State Farm Fire and Casualty Co., 2015 WL 6750731 (E.D. Pa. 2015) (internal citations omitted).
4 Appleman on Insurance is an authoritative treatise published by LexisNexis.
5 Luchansky, 357 Pa.Super. at 138-139 citing 4 Appleman, Insurance Law and Practice § 2123.